Posted 9 a.m. Monday, July 15, 2024
Professor answers common questions about a growing industry
Fintech, or Financial Technology, is a growing field that is transforming the banking industry by using computers to provide financial services and solutions.
UW-La Crosse Computer Science & Computer Engineering Professor Kenny Hunt answers some common questions about Fintech below. UWL's Computer Science & Computer Engineering offers graduate certificate programs in FinTech in collaboration with UW-Parkside and UW-Extension.
Fintech meaning
The field of Financial Technology, also known as "fintech", describes the use of computing technologies to provide financial services and solutions. Fintech covers topics such as cryptocurrencies, blockchains, payment systems, crowdfunding platforms, lending platforms, regulatory compliance and risk management systems in addition to many others.
How will fintech affect the future of banking?
Fintech has already transformed banking through the use of mobile apps that allow for deposits and fund transfers along with fast and convenient fund transfer through systems like Venmo and PayPal. In the future, these systems will expand as will systems that support robust security and fraud detection, more efficient lending and borrowing platforms, digital contracts, robotic process automation, and cross-border payment systems that allow faster and more convenient international commerce.
Can fintech replace banks?
Fintech does not compete with the banking industry but enables and strengthens the services that banking provides. Brick-and-mortar banks provide a number of important services that computing systems cannot duplicate. Many customers value the personal interaction and financial advice that these locations provide. Banks are also strongly regulated and are thus perceived as offering stable and secure services that similar fintech startups may not be able to match for some time.
Are fintech companies regulated?
Fintech companies are regulated, but the extent and nature of these regulations can vary significantly depending on the country and the type of services provided. Some financial technology fields are so new that legislative bodies have not yet figured out the best way to regulate those systems, if it at all. Cryptocurrency is a great example since regulatory frameworks impact areas such as taxation, reporting requirements that seek to mitigate financial fraud, and licensing requirements.
How the fintech industry works
The fintech industry uses computing technology to provide a very broad variety of financial services. These services typically connect to a variety of specialized platforms through the internet that perform tasks like user authentication, data encryption for increased security, the use of AI and machine learning for fraud detection, along with sophisticated data analysis engines that ensure the application complies with all reporting and regulatory requirements.
What is the career outlook for Fintech?
The career outlook in financial technologies is strong with job growth projected at an above-average 12% during the next decade. While specific jobs within fintech vary greatly, annual salaries in the field are very strong. The median salary within this field is approximately $84,000.
Careers in the fintech industry
Careers span a large range of expertise from a less-technical business focus to a more-technical computing focus. Tax managers, financial analysts, digital finance managers, risk analysts, business analysts, software developers, and software managers are among the range of specific career titles in this discipline.
What is the latest advancement in fintech?
Although the entire fintech industry is relatively new, I would point to smart contracts and decentralized financial networks (DeFi) like Ethereum or Bitcoin.
Who is the biggest fintech company?
Some of the largest players in the industry include companies such as Robinhood, Visa, Ant Group, Fiserv, Mastercard, Stripe, PayPal, and Block (you probably know them through their app CashApp).